In response to recent news reports on a seminar for financial planners, American International Group Inc. (AIG) clarified that the meeting was essential, and most of the costs of the seminar were sponsored.
Last week, the 2008 Asset Management Conference was held at the Pointe Hilton Squaw Peak Resort in Phoenix, which included many senior managers at AIG. Reports were abuzz that AIG spent lavishly for the conference with the $150 billion granted by the U.S. Treasury, as a part of its rescue plan.
AIG chairman and chief executive officer, Edward Liddy said, "Recent news reports have grossly mischaracterized an American International Group seminar for 150 independent financial planners held in Phoenix last week."
Liddy pointed out that the financial planners are not AIG employees. More than 90% of the costs for the seminar were paid either by sponsors or by the independent financial planners themselves. The cost to AIG for this event was minimal, Liddy added.
Some sources said that eighteen participating product sponsor firms were underwriting $320,000 of the total meeting cost of $343,000. The company's portion of the total meeting costs was under $25,000.
The AIG chief further said that such seminars are essential to keep independent financial planners abreast of investment products and services including those offered by AIG. The financial planners are responsible for generating almost $200 million in revenue this year for AIG as of September 30.
On October 10, Liddy directed all AIG employees and subsidiaries to reduce expenses and conserve cash, including the cancellation of all nonessential conferences or meetings, unnecessary travel and excessive overhead. Since then, the company has canceled more than 160 events.
Liddy said, "This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the U.S. taxpayer."
AIG is currently trading at $2.06, down 22 cents or 9.65%.
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